Dear Council Members:
I greatly
appreciated listening to your February 23 study session on the potential hotel
at 1400 El Camino Real. Given the
preliminary state of discussion, and the ultimate desirability of a hotel,
keeping the conversation going was the right decision. I would like to note, though, a perspective
not expressed.
Because the
project would trigger public benefit negotiation, according to the Specific
Plan the city could ask the developer for amenities or possibly additional
revenue over and above the hotel Transit Occupancy Tax. The ToT will come to the city no matter
what size hotel is built.
But now, the city
has implicitly told the developer that, since they “need” a loan (or other
source) of $1 million (a modest amount for such a project) from the
city, then it would not make sense for Menlo Park to ask for benefit “over” the ToT. The city has effectively said, “OK, hotel
ToT, at the increased FAR, is sufficient ‘intrinsic’ public benefit for us to
be satisfied with that.”
That may indeed be
a fine decision for the city. After all,
the city directly benefits from additional ToT created by additional hotel
rooms created in turn through increased FAR. However, so do the investors. They also benefit nicely if they know,
now, that the city is unlikely to ask for additional public benefit, even
though the Specific Plan allows that. Instead,
the project investors can be assured that Menlo Park will be satisfied with ToT revenue alone.
In my opinion,
this is a strategic mistake on the part of the city. First, it assumes away our choice of
working for more than the ToT alone with no explicit discussion of that option at all,
even as the Specific Plan provides for that. The ToT could count as the public benefit, but
it could also count for only a portion of the public benefit. To decide that, it would be helpful to compare the increase in ToT, with increased FAR, relative to the increase in hotel value through increased FAR.
Second, if the
developer is joining with the city as a de facto partner, through a contractual
agreement on ToT or city loan, then that may limit our
ability to ask for design changes when the detailed design is put forward. While a potential agreement on funding may be
advantageous to all parties, it also harbors some moral hazard. Preliminary
cost estimates are often low, so one can imagine pushback from the developer from
a demand by the city that the project be modified. Again, to me this is not strategically
sound. Perhaps these issues can be
sorted out through your discussions with staff, the developer and city
residents.
Finally, I urge
all developers to come forward with any style of architecture involving high
design and execution standards. In the
Planning Commission discussion of the 1300 ECR preliminary design, two
Commissioners (myself and John Onken) were not altogether pleased with the
‘Santa Barbara Mission’ style selected. The reason is that, that style,
through overuse and lack of architectural imagination, is potentially a heavy-handed
cliché. I did say that the detail work,
building forms, windows and general visual interest presented by Greenheart’s
initial design looked like it avoided that, but the concern remains. There is good and bad architecture in all styles, involving different
costs and design tradeoffs, so one has to be careful in navigating, much less
directing, those conflicting goals. A design complementing rather than imitating 1300 ECR or the Stanford Park hotel could be effective for these reasons. Regarding
this developer, the city cannot be put in the position of weakening its
architectural control because of a tacit cost agreement.
Sincerely,
John Kadvany / Menlo Park Planning Commissioner
Received on Wed Feb 25 2015 - 08:21:51 PST